Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 10 paragraph 6

Alternative finance relief denied where control of the financial institution is acquired

Schedule 10, paragraph 6 removes the land transaction tax relief for alternative finance arrangements (such as Sharia-compliant property finance) where those arrangements, or any connected arrangements, include provisions for someone to acquire control of the financial institution involved.

• The relief under paragraph 2 (where land is sold to a financial institution and leased back to a person) does not apply if the arrangements include provisions for someone to acquire control of the financial institution.
• This anti-avoidance rule catches not only the alternative finance arrangements themselves but also any connected arrangements, even if they involve third parties who are not direct parties to the finance arrangements.
• The rule also applies where the acquisition of control is conditional — for example, where control would pass only if a particular event occurs or an action is carried out.
• "Control" of the financial institution is determined by reference to section 1124 of the Corporation Tax Act 2010, which looks at whether a person holds the majority of share capital, voting rights, or rights to income or assets on a winding up.